Why is the CEO of high-flying startup Bird selling shares?

By Jonathan Berr

Updated on: June 20, 2018 / 3:31 PM
/ MoneyWatch

Travis VanderZanden, CEO of motor-scooter sharing service Bird, is in the spotlight again. He first came to Wall Street's and Silicon Valley's attention earlier this year when his company was the fastest to become a "unicorn," a privately held company with a $1 billion valuation, which in this case had reportedly doubled within weeks.

Now, it's the former Uber and Lyft executive's decision to sell some of his shares less than a year after the company was launched that has him back in the news.

VanderZanden unloaded his stock as part of Bird's series C fund-raising round because it was oversubscribed and he wanted to make room for additional strategic investors, according to a person familiar with the situation. Bird's board approved of the transaction because it also wanted to bring in additional investors. VanderZanden invested millions of his own money in the Santa Monica, California, company when it was seeking seed funding.

"I have never seen revenue grow this fast in an early stage startup. Ever," Mark Suster, a managing partner at Upfront Ventures, which invested in Bird, told Vanity Fair. "I look at the data and it's undeniable."

The company has had a rocky history. It angered Santa Monica city officials after it deployed 1,000 of its shared black electric scooters without informing them. After a lawsuit, Bird paid $112,000 in fines and agreed to obtain the necessary permits.

According to CrunchBase, Bird has attracted more than $260 million in funding, including from big names like Sequoia Capital, Valor Equity Partners and Tusk Ventures. According to media reports, it's highly unusual for a CEO to sell shares as Bird's stage of development.

A spokeswoman for Bird declined to comment for this story.

According to The Information, the amount of "founders preferred stock" has dropped by one-third to nearly 7.5 million shares. VanderZanden is the most likely holder of those shares because he's Bird's only founder. If the shares were sold at the same price as the company's latest fund-raising round, the publication said, VanderZanden might have netted about $44 million.